Tuesday, January 03, 2006

Russian Gas Influence Part 2 – European Union and Us

I don’t think I have ever learned as much about gas then I have in the last few days. What I have learned has scared me. When ever I look upon those hippies in the Friends of the Earth and people who decided to live in Hobbit type huts I looked upon them with a kind of smugness. But now I am nearly ready to go on the street protesting with them. Not because of any great belief in being friends with polar bears but because I realise how vital self-sufficiency in energy is. We should be investing heavily in off-shore oil and gas, wind farms, wave power, solar rain power, tidal power, biomass, hamster power whatever we need to cut down on imports. Because those who have the energy have the power and Russia seems to have a desire to wield it

Even though Russia is only the 16th richest country in the world it is a member of the G8. Konstantin Kosachev, chairman of the foreign relations committee of the State Duma(Dail/Parliament), Said that "Russia's participation is not a gesture of lordly generosity. It is recognition for the obvious fact that Russia remains a world power," While the Russian Army is not what it was the energy supplies do in fact give it a powerful position on the world stage. The world recession in the 70s can be directly correlated to the Saudis reduction of oil supplies.

However as gas is piped Russia would have to bring gas through some countries such as the Ukraine Belarus and Poland. This would leave Russia’s interests in jeopardy of being controlled by these countries. As they could decide to siphon gas if Russia cut their gas for not towing the Kremlins line or stop the gas for ransom.

However they have started construction on a project to counter this. Although it is more expensive to build they are building a direct pipeline to Germany and beyond called the North European Gas Pipeline. Due to be completed in 2010. Controlled by Gazprom with a 51% stake(the other lot is controlled jointly by 2 German companies). The new pipeline will be an underwater pipeline along the Baltic sea bed. As it is in international waters it would be free from interference. However if Finland and Estonia rescinded a 1994 treaty (pdf) they could halt it. However neither Finland or Estonia are likely to do that and Russia may try keeping those two countries on side. (For full explanation Brussels Journal.) The newly appointed chairman of the North European Gas Pipeline is former German Chancellor Gerhard Shroeder. Who weeks prior to his leaving office signed the pipeline agreement. This has lead to some Germans being annoyed claiming he was manufacturing his own pension scheme. (Crazy Germans as if a politician would ever dream of using their office to feather there own nest.)

It is expected that by 2020 the EU will import 75% of it natural gas needs. This puts Russia in a very strong position. All it would need to do is threaten turning off the taps and Europe would have to capitulate to what ever demand Russia makes or risk economic destruction. Russia is already trying use it market to effect countries. A recent incident in Norway shows Russia’s thinking. A Russian fishing boat “kidnapped” 2 Norwegian fisheries inspectors as the boat was escaping Norway’s coast guard. Russia doesn’t like Norway enforcing fishing rights in the Spitsbergen zone. In response to this (From Secular Blasphemy)

Russia's food safety authorities claimed to have found extreme content of cadmium and lead in Norwegian fresh farmed salmon, and instituted a total ban on imports. Russia is Norway's largest customer of seafood products. The claims were beyond sane in every way, so obviously designed to send a 'signal', as they say, while leaving no reasonable way to believe there was any actual truth in the claims. Norway's food safety authorities not only found the fish perfectly safe, but found it impossible, no matter how much heavy metals they subjected salmon to in tests (don't tell PETA), to duplicate the absurd values the Russians claimed were present. Also, Singapore, alerted by the row, decided to test Norwegian salmon and found it totally safe.

This and the Ukraine incident seems to me to show Russia is willing to use economic force to impose its will on other nations.

So how will Russian Gas effect Irelands future. As per 2001 estimates Ireland consumes 4.1999 billion cu m and produces 815 million cu m. And as of 2001 we have 9.911 billion cu m proved reserves. So theoretically we could be self sufficient in gas for over 2 years. However we doubt we have the ability to tap the reserves to that extent. This does bring the controversy of the Corrib Gas back into focus. It is in our strategic interest that that gas is taped at some stage in the future (possibly father into the future is even more in our interest). It is possible that Ireland does have large reserves of gas and oil in the Atlantic. With the famous Rockall reported to be rich in oil.

If the Corrib Field does eventually get tapped successfully whether on or off shore it may increase companies coming into Irish waters searching for oil and gas. If they do and find more, this can help stabilise Irelands’ future by giving a secured supply lessening the economic blow. The question then is would some larger nation invade for the supply? If we do not find extra supplies we are in the same boat as the rest of Europe. With Ireland being plunged into a recession similar to the 70s where inflation neared 25% in 1975 (which is almost Iraq levels).

Europe needs to learn from this Ukraine incident and realise that Russia is willing to use its resources for political gain. Now they may be willing to supply our energy needs but this may be just to create the situation where Europe realise solely on Russia. At that point they can then start exerting pressure. We need to develop more sources of energy. We need to find more oil and gas and even dare I say it investigate nuclear energy (Finland is rebuilding it nuclear industry). But also develop renewable sources, conserve more. So grab your stripy woolly jumper, grow your hair and don’t wash. Because the era of the tree hugging hippy may be coming sooner then you might think. That or another cold war.